ETCFO Accounting Diaries: BDO India eyes Rs 5,000 cr revenue by 2028

The world’s fifth largest accounting firm BDO is targeting to grow its India business five times by 2028 to Rs 5,000 crore on robust growth in audit and consulting lines, a senior official at the firm said.

“In the next five years, we are looking at onboarding 25,000 people in India and this should translate to about Rs 5,000-6,000 revenues…,” BDO India Managing Partner Milind Kothari told ETCFO in the first episode of Accounting Diaries.

Growth
In this financial year FY24 itself, BDO India is planning to add 2,500 employees to its current strength of 5,000 number and is targeting to cross Rs 1,100 crore revenue. The accounting firm which began its operations in India just about a decade back in 2012, had grown 40% last year, clocking Rs 800 cr business.

The BDO official expects growth to come from mainly audit business, a revenue line that constitutes about 35% of the firm’s revenues, followed by advisory of which outsourcing is a big part, and then other services including tax.

Among industries, BDO continues to see BFSI and IT as its major drivers. “Going forward, we will also look at manufacturing and automobile, as our drivers,” he said.

Attrition
The BDO executive said the attrition problem in the industry is now stabilizing and added that his firm is planning to increasingly take jobs to tier 2 and tier 3 cities so as to manage the issue.

He expressed concerns about mid to small firms likely to find challenges in hiring and retaining talent. “The talent is increasingly getting vanished from mid-sized and small-sized firms. It is devastating and the way the market forces are emerging, it is getting more lopsided than ever before...smaller firms will get it difficult to grow,” Kothari said.

Regulation
The BDO executive emphasized the need for a regulatory frawmework which would encourage young professionals to join the profession.

Also, he said the regulators need to continue working collectively with all the stakeholders of the financial reporting ecosystem which includes companies, service providers (like auditors), and investors.

The BDO official batted for mandatory joint audits as a way to improve audit quality for corporates as well as said the current regulatory framework is enough to ensure the independence of auditors. The issue of independence arises since auditors are seen as conflicted as they may take up more lucrative consulting work from their same audit clients.

In recent years, amid rising corporate failures and accounting scams, including a Rs 1-lakh crore fraud at construction financier, IL&FS, the auditing profession has come under the increased regulatory and public spotlight. There have been questions raised on the independence of the auditors and therefore audit quality.